CONCORD — Cabarrus County Commissioners and the Cabarrus County Board of Education met Oct. 28 to talk about funding needs, capital projects and how much money is available for those projects.
It’s a complicated process, so county leaders wanted to make sure they are on the same page.
Among the topics discussed were teacher supplement increases, debt and capital needs, operating costs and impacts of opening new schools and Cabarrus County Schools Capital Plan priorities and estimated costs.
The joint meeting lasted just under two hours at the Governmental Center in downtown Concord.
“The primary reason for our meeting was just, we don’t get to do this very often, so when we can meet together and discuss information that’s important to our community, I think it goes a long way,” said Cabarrus County Commissioner Steve Morris. “It’s for all of us to get the same information at the same time, being on the same page and having a true understanding of the issues that we face and the educational needs in our community.”
The Board of Education discussed its roles and responsibilities, which includes governing the local school administration unit; hiring and supervising the superintendent; setting education policies within state guidelines; preserving district’s assets and managing district budget; informing county commission of district needs; and determining redistricting.
Then the county commissioners shared their roles and responsibilities within the local school districts, which are to appropriate local operational funding; conduct special school referendums; appropriate funding for school construction; and can initiate school mergers.
The county and the school board work together on agreements for funding and new projects.
“If you don’t talk to each other, if you don’t understand each other’s needs and share what’s going on, the communication factor and how people get along and share information makes this county very successful in reaching the goals they are reaching,” said Pam Dubois, former deputy county manager.
Teacher supplements have increased againTeacher supplements in Cabarrus County continue to increase.
The state of North Carolina pays teachers a salary, and then the county will tack on an additional supplement.
In the 2019-20 school year, teachers in Cabarrus County are receiving an additional 9 percent supplement of their state salary. In the 2013-14 school year, teachers were given a 5.81 percent supplement. Last school year, the supplement was at 8 percent.
In the 2016-17 school year, the supplement was changed from a flat amount to a percentage of teacher salary.
The state average for supplement is just over 8 percent.
“That shows the amount of cooperation and communication that has occurred, because when we started the budget a year ago for this current fiscal year, it was thought that we probably wouldn’t get a teacher supplement increase,” said Cindy Fertenbaugh, with the Cabarrus County Board of Education. “We worked with you all, so that was sort of our priority. We ended up doing a blended funding of it, partly from our fund balance and the commissioners granted the other half.”
Debt and capital needs overviewThe Cabarrus County Board of Commissioners and Cabarrus County Schools came together to discuss the challenges faced in coming years when talking about funding needs versus debt capacity.
“I feel a little bit like a rain cloud that has to come in and deliver some unfortunate news,” said Rodney Harris, deputy manager for Cabarrus County.
Harris led the discussion, saying a capital project is anything that costs $100,000 or more and has a useful life of five years or more, which includes land, equipment or new construction or major renovations to facilities.
How the county funds capital projects is through three pots of money — current revenue (property tax, sales tax, fees and permits); fund balance (can transfer unassigned fund balance over 15 percent to capital reserve); and debt (bonds, installment financing).
Harris said Cabarrus County holds more debt than peer group counties, requiring sound financial planning to prevent credit rating impacts.
“Our board and staff have done an excellent job of managing our financial position to ensure that these metrics haven’t impacted our credit rating,” Harris said. “We are still able to issue debt. We are still able to get favorable interest rates despite those metrics.”
Harris said the county paid about $22 million of the approximately $46 million of school-system-related debt in the 2019 fiscal year. Plus, the lottery distribution added about $2.4 million for the school capital.
The county will have a max debt capacity of about $150 million after Fiscal Year 2025, but the issuance of that debt would be subject to the board of commissioners’ desires and approval.
With that, Cabarrus County Schools has $381 million of identified capital needs through 2027, while other county capital funding needs are for county facilities, the new courthouse in downtown Concord, for Rowan-Cabarrus Community College and Kannapolis City Schools rounds out the rest of the $778 million of identified capital needs.
“It’s also important to keep in mind that these figures are almost certainly on the low end,” Harris said. “There are needs that are being currently identified that will be part of the next budget cycle from the county perspective.”
The county has some other big projects in the works, which include an $89 million Department of Human Services headquarters and a $33 million Emergency Management Services headquarters.
There are local parks needing upgrades and renovations that will cost an estimated $89 million, and a library and senior center in western Cabarrus County for about $23 million.
As for the new courthouse, the construction is anticipated to begin in May and be completed in early 2023, with renovation to the existing courthouse to start in 2024. The total project budget for the courthouse is about $125 million.
“The courthouse is a significant expense, similar to schools. It is state-mandated,” Harris said. “We have to cover this expense.”
Harris said the county has $150 million in debt capacity, but it needs $778 million, which means they are short nearly $630 million that does not have potential funding identified.
The county has contracted with a financial adviser to help develop a community investment fund, which would separate the debt service from the general fund, increase transparency and build capacity for future debt. The county also is developing a debt-affordability model, which will help it plan long-term.
“Our commissioners have been advocating to our state legislators for the last several years to try and find other alternative revenue solutions,” said county manager Mike Downs. “We are going to keep looking for revenue sources that don’t put 100 percent burden on our citizens. We are going to continue to keep pushing.”
Operating costs and impacts of opening new schoolsRepresentatives from the Cabarrus County Schools talked about operating costs and the impacts of opening new schools.
There are 378 locally paid positions within Cabarrus County Schools, and there are about 4,000 employees in the school district.
“We are fortunate local dollars support these positions,” said Cabarrus County Schools Chief Financial Officer Kelly Kluttz.
The district is opening two new schools in the fall — Hickory Ridge Elementary School in Harrisburg and West Cabarrus High School.
When talking about local operating costs for schools in the district, funds are needed for utilities and staffers. For an elementary school, the utilities are around $250,000 and staff is $600,000. It increases to $300,000 for utilities and $900,000 for staff at a middle school and $350,000 for utilities and $1.5 million for staff at high schools.
Cabarrus County Schools are working on future replacements for Coltrane-Webb STEM, R. Brown McAllister STEM and Beverly Hills elementary schools, Opportunity School, Northwest Cabarrus High School and Central Cabarrus High School.
School leaders are looking at building a new middle school feeder for Jay M. Robinson and renovations to the current Northwest Cabarrus High School and turn it into a middle school and renovations to the middle school and make it an elementary school.
Those capital projects will add more than $291 million to the budget.